I had a fascinating meeting today with a General Partner at one of the Valley’s top venture capital firms. He asked me a simple question: “What advice do you have for me as the VC markets continue to shift”?
My response might surprise you: “Recruit a non-investor industry expert – ideally an active senior line executive in an admired public company – onto the boards of your top 3 – 4 portfolio companies.” There are four reasons for this simple move:
- CEO Mentoring A statured senior executive will have great credibility with your company’s Founder-CEO. S/he will help coach/mentor your Founder in ways that investors cannot.
- Positive Branding The addition of a really credible public company leader will tell the world that your company is going places.
- Relationships This board member will provide introductions to dozens of important thought leaders, including clients and partners for the future.
- Pattern Recognition The right public company executive will understand how to reshape your company for ultimate IPO or sale – at maximum valuations.
To make this work, you need to ensure that your Founder-CEO is bought in to support the board addition. Likewise, other board members will need to support this move for the new non-investor board member to have impact. The cost of this move is typically less than 1% of the company’s stock vesting over four years. And the impact can be…